COMMISSIONER OF CUSTOMS.versusSAYED ALI & ANR.

                     [2011] 2 S.C.R. 1045


               COMMISSIONER OF CUSTOMS.                           A
                               v.
                    SAYED ALI & ANR.
          (CIVIL APPEAL NOS. 4294-4295 of 2002}
                     FEBRUARY 18, 2011
                                                                  B
                 [D.K. JAIN, H.L. OATIU, JJ.]

      CUSTOMS ACT, 1962:

        Section 2(34) and 28 read with s. 111 (d) - "Proper       c
  officer''-Notice for payment of duty, interest etc. - Issued by
  Collector of Customs (Preventive) - Propriety of- HELD: Only ·
  such a Customs Officer who has been assigned the specific
  functions of assessment and re-assessment of duty in
  jurisdictional area, where the import concerned has been 0
  affected, by either the Board or the Commissioner of Customs
  in terms of s.2(34), is competent to issue notice uls 28 -
   Specific entrustment of function by either the Board or the
   Commissioner of Customs is, therefore, the governing test to
  determine whether an "officer of customs» is the "proper E
   officer»- In the instant cases, the import manifest and the bill
  of entry having been filed before the Collectorate of Customs
   (Imports) Mumbai, the same having been assessed and
  clearance for home consumption having been allowed by the
   proper officer on importers executing bond, undertaking the
   obligation of export, the Collector of Customs (Preventive), not F
   being a "proper officer» within the meaning of s. 2(34) of the
1 Act, was not competent to issue show cause notice for re-

   assessment u/s. 28 of the Act- Notifications No. 250- Cus and
   251-Cus dated 27.8.1983.
                                                                    G
        Civil Appeal Nos. 4294-4295 of 2001 arose out of the
   notice issued to assessee-respondent No.2, a
   partnership firm engaged in the business of carpet

                              1045                                 H
    1046   SUPREME COURT REPORTS              [2011] 2 S.C.R.

A manufacture, by Collector of Customs (Preventive) on
  16.4.1994 asking the assessee to show cause as to why
  goods under seizure be not confiscated and customs
  duty be not levied in terms of s. 28 (1) of the Customs Act,
  1962 by invoking extended period of limitation. When the
B matter reached the Customs Excise and Gold (Control)
  Appellate Tribunal, it held that the Commissioner of
  Customs (Preventive) did not have jurisdiction to issue
  the show cause notice. When on similar facts appeals
  giving rise to CA Nos. 4603-4604 of 2005, came before
c CESTAT, it upheld the issuance of show cause notice by
  the Collector of Customs(Preventive), u/s 20 of the Act.

       Allowing CA Nos. 4603-4604 of 2005 and dismissing
    CA Nos. 42304-4295 of 2002, the Court

D      HELD: f.1 It is evident that the notice u/s 28 of the
  Customs Act, 1962 has to be issued by the "proper
  officer". Section 2(34) which defines the term "proper
  officer" makes it clear that only such officers of customs
  who have been assigned specific functions would be
E "proper officers" in terms of s.2(34). Specific entrustment
  of function by either the Board or the Commissioner of
  Customs is, therefore, the governing test to determine
  whether an "officer of customs" is the "proper officer".
  [para 12-13] [1057-0-G]
F      1.2 From a conjoint reading of s.2(34) and s.28 of the
  Act, it is manifest that only such a customs officer who
  has been assigned the specific functions of assessment
  and re-assessment of duty in the jurisdictional area
  where the import concerned has been affected, by either
G the Board or the Commissioner of Customs, in terms of
  s. 2(34) of the Act is competent to issue notice u/s 28 of
  the Act. Any other reading of s. 28 would render the
  provisions of s. 2(34) of the Act otiose in as much as the
  test contemplated u/s 2(34) of the Act is that of specific
H
  COMMISSIONER OF CUSTOMS. v. SAYED ALI & 1047
                  ANR.
conferment of such functions. [para 14) [1057-H;                A
1058-A-B]

     1.3 It cannot be said that once territorial jurisdiction
is conferred, the Collector of Customs (Preventive)
becomes a "proper officer" in terms of s.28 of the Act, as
                                                                8
it would lead to a situation of utter chaos and confusion,
in as much as all officers of customs, in a particular area
be it under the Collectorate of Customs (Imports) or the
Preventive      Collectorate,      would     be     "proper
officers". Therefore, it is only the officers of customs,       C
who are assigned the functions of assessment, which of
course, would include re-assessment, working under the
jurisdictional Collectorate within whose jurisdiction the
bills of entry or baggage declarations had been filed and
the consignments had been cleared for home
consumption, will have the jurisdiction to issue notice u/      D
s. 28 of the Act. [para 14) [1058-8-E]

     1.4 In the instant cases, the import manifest and the
bill of entry having been filed before the Collectorate of
Customs (Imports) Mumbai, the same having been E
assessed and clearance for home consumption having
been allowed by the proper officer on importers
executing bond, undertaking the obligation of export, the
Collector of Customs (Preventive), not being a "proper
officer" within the meaning of s. 2(34) of the Act, was not . F
competent to issue show cause notice for re-assessment
u/s.28 of the Act. Nothing has been brought on record
to show that the Collector of Customs (Preventive), who
had issued the show cause notices was assigned the
functions u/s.28 of the Act as "proper officer" either by G
the Board or the Collector/Commissioner of Customs.
[para 16) [1058-H; 1059-A-C]
    1.5 Notifications No. 250-Cus and 251-Cus., both
dated 27 .8.1983, issued by the Central Government in
                                                                H
    1048   SUPREME COURT REPORTS              [2011] 2 S.C.R.

A exercise of the powers conferred by sub-s. (1) of the s.4
  of the Act, appointing Collector of Customs (Preventive)
  etc. to be the Collector of Customs for Bombay, Thane
  and Kolaba Districts in the State of Maharashtra did not
  ipso facto confer jurisdiction on him to exercise power
B entrusted to the "proper officers" for the purpose of s.28
  of the Act. [para 16] [1059-E-F]

      1.6 It cannot, therefore, be said that the source of
  power to act as a "proper officer" is ss. 4 and 5 of the
  Act and not sub-s.(34) of s.2 of the Act. The said sections
C merely authorize the Board to appoint officers of
  customs and confer on them the powers and duties to
  be exercised/discharged by them, but for the purpose of
  s.28 of the Act, an officer of customs has to be
  designated as "proper officer" by assigning the function
D of levy and collection of duty, by the Board or the
  Commissioner of Customs. [para 16] [1059-D-F]

        Union of India & Ors. Vs. Ram Narain Bishwanath & Ors.
    (1998) 9 sec 285 - held inapplicable.
E
      1.8 This judgment shall not preclude the Revenue
  from initiating any proceedings against the importers for
  recovery of duty and other charges payable in respect of
  the subject goods, if permissible under the Act. [para 17]
F [1060-C-D]
       Konia Trading Co. Vs. Commissioner of Customs, Jaipur
  2004(170) ELT 51 (Tri.-LB); Manohar Bros. (Capacitors) Vs.
  Collector of Customs JI, Bombay, 1998 (98) ELT 821 (Tri);
  Collector vs. Manohar Bros. (Capacitors) 2004(166) ELT
G A1-52(SC); Devilog Vs. System India Vs. Collector of
  Customs, Bangalore 1995 (76) ELT 520 (Kar.); Orient Arts
  & Crafts Vs. Commissioner of Customs (prev.) Mumbai
  2003(155) ELT 168 (Tri~Mum); and /nformatika Software (P)
  Ltd. & Ors. Vs. Commissioner of Customs (P.) Calcutta.1997
H
   CpMMISSIONER OF CUSTOMS. v. SAYED ALI &              1049
                   ANR.

 (73) ECR 348 ((Tri. Kolkata); The Commissioner, Sales· Tax,     A
 U.P. vs. Mis. Suraj Prasad Gouri Shankar (1974) 3 SCC 230;
 and Sharad Himatlal Daftry vs. Collector of Customs 1988
 (36) ELT 468 (Cal.) - cited.
   '
                      Case Law Reference:
                                                                 B
  2004(170) ELT 51 (Tri.-LB)           cited         para 7

  (1998) 9 sec 285                held inapplicable para 9

  1998 (98) ELT 821 (Tri)              cited         para 9
                                                                 c
  2004(166) ELT A152(SC)               cited         para 9
  1995 (76) ELT 520 (Kar.)             cited         para 10
  2003(155) ELT 168 (Tri-Mum)          cited         para 10
  1997 (73) ECR 348 ((Tri. Kolkata) cited            para 10     D

  (197 4) 3 sec 230                    cited         para 10
  1988 (36) ELT 468 (Cal.)             cited         para 11

     CIVIL APPELLATE JURISDICTION : Civil Appeal No.             E
 4294-4295 of 2002.

      From the Judgment & Order dated 01.02.2002 of the
  Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT)
  Mumbai in final order No. Cll/342-43/WZB/2002 in Appeal Nos.   F
· C/660-661/96-Bom.

                               WITH
 Civil Appeal No. 4603-4604 of 2005.

     V. Shekhar, Harish Chander, Joseph Vellapally, Amey         G
 Nargolokar, T.A. Khan Zangpo Sherpa, 8. Krishna Prasad, R.
 Nedumaran, Vipin Jain, Reena Khair, S.R. Setia, Ragvesh
 Singh, Neha S. Verma for the appearing parties.

                                                                 H
    1050    SUPREME COURT REPORTS                 [2011] 2 S.C.R.


A       The Judgment of the Court was delivered by

       D.K. JAIN, J.: 1. Challenge in these civil appeals, filed
  under Section 130E of the Customs Act, 1962 (for short "the
  Act"), is to the orders dated 1st October, 2001 and 4th January,
8 2005 passed by the Customs, Excise & Gold (Control)
  Appellate Tribunal (for short "the CEGAT") and the Customs,
  Excise & Service Tax Appellate Tribunal (for short "the
  CESTAT") respectively. In the first set of appeals (Nos. 4294-
  4295 of 2002), the CEGAT has held that the Commissioner of
  Customs (Preventive), Mumbai, not being a "proper officer" as
C defined in Section 2(34) of the Act, did not have jurisdiction to
  issue show cause notice in terms of Section 28 of the Act.
  However, in the second set of appeals (Nos. 4603-4604 of
  2005), the CESTAT has, to the contrary, held that the
  Commissioner of Customs (Preventive), Mumbai had
D jurisdiction to issue notice under Section 28 of the Act.

       2. Since the question of law arising in all the appeals is
  similar, these are being disposed of by this common judgment.
  However, to appreciate the controversy, facts in C.A. Nos. 4294-
E 4295 of 2002 are adverted to. These are:

       Respondent No. 1 is a partner in respondent No. 2 firm
  viz. M/s. Handloom Carpet, which is engaged in the business
  of carpet manufacture/export. Respondent No. 2 was charged
F with misusing the Export Pass Book scheme by selling goods
  cleared duty free in the open market or selling the pass book
  on premium in violation of the ITC restriction imposed on such
  sale. Investigations in the matter were conducted by the Marine
  and Preventive Wing of the Customs. On 28th August, 1991,
  the Assistant Collector of Customs (Preventive), Mumbai,
G issued to the respondents a show cause notice, alleging
  violation of the provisions of Section 111 (d) of the Act. On 3rd
  February, 1993, the same officer adjudicated upon the said
  show cause notice, confirming the demands raised in the show
  cause notice
H
  COMMISSIONER OF CUSTOMS. v. SAYED ALI & 1051
             ANR. [D.K. JAIN, J.]
     3.Being aggrieved, the respondents preferred an appeal        A
before the Collector of Customs (Appeals), who vide order
dated 14th. December, 1993, allowed the appeal holding that
since the matter involved demand of duty beyond a period of
six qtonths, the show cause notice was required to be issued
by the Collector, and not by the Assistant Collector.              B
Nevertheless, the Collector (Appeals) granted liberty to the
department to re-adjudicate the case by issuing a proper show
cause notice.

     4. Accordingly, the Collector of Customs (Preventive) C
issued show cause notice dated 16th April, 1994 asking the
responde~~s to show cause as to why the goods under seizure
valued at Rs.1,04, 118.52/- should not be confiscated, and
customs duty amounting to Rs.5,07,274/- be not levied in terms
of Section 28(1) of the Act, by invoking the extended period of
limitation. Penalties under Sections 112(a) and (b)(i) and (ii) D
of the Act were also proposed.
      5. In reply to the show cause notice, the jurisdiction of the
Collector of Customs (Preventive) was questioned on the
ground that the jurisdiction of a Commissioner by virtue of . E
Notification No. 251/83 being more specific and limited in
nature, the said notification will prevail over Notification No.250/
83. Vide order dated 19th August, 1996, the Collector of
Customs (Preventive) rejected the objections regarding his
jurisdiction, holding thus:                                          F
    "It is not disputed by the parties that by virtue of notification
    No. 250/83 the commissioner of customs (preventive)
    Mumbai is appointed as Commissioner of Customs in the
    areas comprising Districts of Mumbai, Thane and Kolaba
    and a concurrent jurisdiction is thus vested in respect of G
    Mumbai port also. What is being contended is that the
    jurisdiction of commissioner of customs, Mumbai under
    Notification No. 251/83 is more specific and limited. In this
    regard it is relevant to refer to the definition of smuggling
    under the provisions of customs Act, 1962. Under the Act H
    1052    SUPREME COURT REPORTS                  [2011) 2 S.C.R.


A       Smuggling is defined as any act or omission which renders
        the goods to confiscation under the provisions of the Act.
        In this case M/s handloom carpet manufacturer (sic) are
        charged with trafficking of the goods imported and cleared
        only free in violation of the provisions of notification No.
B       117/88 dated 30-3-1988 and fabrication of documents to
        show receipt and consumption of the same in their factory.
        The goods imported and cleared duty free were thus
        rendered liable for confiscation under the provisions of the
        customs Act, 1962 and the customs (preventive)
c       Commisionerate created for the purpose of prevention of
        smuggling and detention of cases of smuggling including
        commercial frauds is thus (sic) competent to investigate
        and adjudicate the case."

    The Collector confirmed the demand of duty of Rs. 5,07,274/-
0 under Section 28(1) of the Act. He also ordered confiscation
    of two consignments of dyes sulphur blue and sulphur blue
    green valued at Rs. 1,34, 118.52/-, and imposed a redemption
    fine of Rs. 1,50,000/-.

E        6. Aggrieved, the respondents preferred appeals before
    the CEGAT. As afore-mentioned, accepting the preliminary
    objection of the respondents regarding jurisdiction of the
    Collector (Preventive), the CEGAT has, vide the impugned
    order, allowed the appeals, observing that:
F       "it is very clear that the Commissioner of Customs
        (Preventive) does not have jurisdiction to issue the
        impugned show cause notice and in view thereof he could
        not have the jurisdiction to adjudicate the matter when
        imports have taken place at Bombay Customs House."
G
         7. At the sake of repetition, it may be noted that although
    the facts obtaining in C.A. Nos. 4603-4604 of 2005 were
    similar to those in C.A. Nos. 4294-4295 of 2002, but, in the
    former case, following the decision of its larger bench in Konia
H
     COMMISSIONER OF CUSTOMS. v. SAYED ALI & 1053
                ANR. [D.K. JAIN, J.]

Trading Co. Vs. Commissioner of Customs, Jaipur1, the             A
CESTAT while upholding the issue of show cause notice by the
Collector of Customs (Preventive) under Section 28 of the Act,
set aside the order of adjudication passed by the said officer
with a direction that the issues be determined afresh by the
jurisdictional Collector of Customs who had earlier assessed      B
the bill of entry in question at Bombay Port.

     8. Hence, the present cross appeals by the revenue and
the importers. At the very outset, we may clarify that these
appeals are confined only to the question of validity of the      C
demands raised by virtue of re-assessment orders passed by
the Collector of Customs (Preventive) Mumbai, pursuant to the
issue of show cause notices under Section 28 of the Act. For
the sake of convenience, hereinafter, both the CESTAT and
CEGAT are referred to as "the Tribunal".
                                                                  D
     9. Mr. Harish Chander, learned senior counsel appearing
on behalf of the Revenue in one set of appeals, contended that
once the Commissioner (Preventive) had been appointed as
Collector of Customs (Preventive), Bombay by virtue of the
Notification Nos. 250/83 and 251/83, issued by the Central        E
Government under Section 4 of the Act, the former became
"proper officer" in terms of Section 2(34) of the Act, and was
competent to issue notice under Section 28 of the Act as the
goods were cleared for home consumption in Bombay. In
support of the proposition that an officer of Customs who has     F
been assigned certain functions, which are to be performed
under the Act is a "proper officer" and such assignment can be
done by the Board or the Commissioner of Customs, reliance
was placed on the decision of this court in Union of India &
Ors. Vs. Ram Narain Bishwanath & Ors. 2 as also on a larger       G
bench decision of the Tribunal in Konia Trading Co. (supra) and
another decision of the Tribunal in Manohar Bros. (Capacitors)


1.   20~-(170) E.L.T. (Tri.-LB).

2.   (1998) 9 sec 285.                                            H
    1054       SUPREME COURT REPORTS               [2011] 2 S.C.R.

A Vs. Collector of Customs-II, Bombay3, the latter having attained
  finality on the dismissal of revenue's appeal by this Court (See
  : Collector Vs. Manohar Bros. (Capacitors)4).

          10. Per contra, Mr. Joseph Vellapally, learned senior
    counsel appearing on behalf of the respondents in C.A. Nos.
8
    4294-4295 of 2002, contended that the statutory powers
    conferred under Section 28 of the Act must be exercised by
    an officer of Customs, who has been assigned those functions
    either by the Central Board of Excise and Customs or by the
C   jurisdictional Commissioner of Customs (Imports). As the
    Commissioner (Preventive) has not been appointed as a
    •proper officer" for the purposes of assessment or re-
    assessment, nor assigned any functions under Section 28 of
    the Act or under any other Section related to assessment of
    goods entered for home consumption, he was not competent
D   to issue notice under Section 28 of the Act, argued the learned
    counsel. It was also urged that mere appointment of a person
    as an officer of Customs with territorial jurisdiction over the
    Mumbai port under Section 4 of the Act, does not ipso facto
    confer authority on him to exercise the statutory powers
E   entrusted to proper officers, as under the Act, while all proper
    officers must be 'officers of Customs', all 'officers of Customs'
    are not "proper officers". In support of the proposition, learned
    counsel heavily relied on a decision of the Karnataka High
    Court in Devilog Systems India Vs. Collector of Customs,
F   Bangalore5 and orders of the Tribunal in Orient Arts & Crafts
     Vs. Commissioner of Customs (Prev.), Mumbai5 and
    /nformatika Software (P) Ltd. & Anr. Vs. Commissioner of
    Customs (P), Calcutta 7• Learned counsel submitted that the
    use of the expression "proper officer" in contradistinction to
G
    3.   1998 (98) E.L.T. 821 (Tri)
    4.   2004 (166) E.L.T. A152 (S.C.)
    5.   1995 (76) E.L.T. 520 (Kar.)
    6.   2003 (155) E.L.T. 168 (Tri-Mum)
H   7.   1997 (73) ECR 348 (Tri-Kolkata)
      COMMISSIONER OF CUSTOMS. v. SAYED ALI &               1055      ·,
                 ANR. [D.K. JAIN, J.]

"officer of customs" in certain Sections in the Act makes it clear   A
that the two expressions cannot be used interchangeably.
Learned counsel contended that if the Revenue's contention
that all "officers of customs" are "proper officers" is accepted,
it would render Section 2(34) otiose, and would amount to re-
writing the Act, leading to administrative anarchy. In support,      B
reliance was placed on the decision of this Court in The
 Commissioner, Sales Tax, U.P. Vs. Mis. Suraj Prasad Gouri
 Shankar8.
       11. Explaining the procedure for clearance of imported
  goods for home consumption, learned counsel submitted that C
  the Act clearly delineates the functions to be performed by the
  Commissioner of Customs (Imports) and the Commissioner
  (Preventive). According to the learned couns_eLunder Section
. 30 of the Act, the owner of a vessel, on arrival or prior to arrival,
  is required to file an Import General Manifest ("IGM") with the D
  proper officer i.e. the Commissioner of Customs (Imports), the
  Rummaging and Intelligence_ Wing of the Preventive Division
  checks the conveyance ~o ens1Jre that all goods in the vessel
  are mentioned in the IGM; then, in terms of Section 31 of the
  Act, an order allowing "entry inwards" is granted by the proper E
  officer, i.e. Commissioner of Customs (Imports); the goods are
  unloaded under the supervision of the Preventive Officer' in
  terms of Section 34; and then, the importer files a bill of entry,
  which is assessed by the "proper officer" i.e. Con:imissioner
  (Imports) who, on payment of all duties by the importer, issues F
. an order allowing clearance of goods for home consumption
  u~der Section 47 of the Act. It was thus, asserted that once
  gdods are manifested, the jurisdiction to pass any order of
  assessment or re-assessment vests in the Collector of Customs
  (Imports) and not in the Collector of Customs (Preventive). To G
  bring home the point, reference was made to a decision of the
  Calcutta High Court in Sharad Himatlal Daftary Vs. Collector
  of Customs9 . .It was submitted that in the instant case, the import
 a.    (1974) 3 sec 230.
 9.    1988 (36) E.L.T. 468 (Cal.)                                   _H
    1056    SUPREME COURT REPORTS                    [2011) 2 S.C.R.

~ manifest and the bill of entry were filed before the Additional
  Collector of Customs (Imports) Mumbai; the bill of entry was
  duly assessed, and the benefit of the exemption was extended,
  subject to execution of a bond by the importer which was duly
  executed, undertaking the obligation of export. Learned counsel
B argued that the function of the preventive staff is confined to
  goods which are not manifested as in respect of manifested
  goods, where the bills of entry are to be filed, the entire function
  of assessment, clearance etc. is carried out by the appraising
  officers functioning under the Commissioner of Customs
c (Imports).
         12. Before adverting to the rival submissions, it would be
   expedient to survey the relevant provisions of the Act. Section
   28 of the Act, which is relevant for our purpose, provides for
 , issue of notice for payment of duty that has not been paid, or
D has been short-levied or erroneously refunded, and provides
   that:
        "28. Notice for payment of' duties, interest etc. -
        (1)When any duty has not been levied or has been short-
E       levied or erroneously refunded, or when any interest
        payable has not been paid, part paid or erroneously
        refunded, the proper officer may, -

        (a) in the case of any import made by any individual for
        his personal use or by Government or by any educational,
F       research or charitable institution or hospital, within one
        year;
         (b) in any other case, within six months,
        from the relevant date, serve notice on the person
G
        chargeable with the duty or interest which has not been
        levied or charged or which has been so short-levied or part
        paid or to whom the refund has erroneously been made,
        requiring him to show cause why he should not pay the
        amount specified in the notice :
H
  COMMISSIONER OF CUSTOMS. v. SAYED All & 1057
             ANR. [D.K. JAIN, J.]
    Provided that where any duty has not been levied or has A
    been short-levied or the interest has not been charged or
    has been part paid or the duty or, interest has been
    erroneously refunded by reason of cdllusion or any wilful ~
    mis-statement or suppression of fact$ by the importer or
    t.he exporter or the agent or employee of the importer or B
    exporter, the provisions of this sub-section shall have effect
    as if for the words "one year" and "six, months", the words
    "five years" were substituted.

It is plain from the provision that the "proper officer" being C
subjectively satisfied on the basis of the material that·may be
with him tha.t customs duty has not been levied or short levied
or erroneously refunded on an import made by any individual
for his personal use or by Government or by any educational,
research or charitable institution or hospital, within one year and
in all other cases within six months from the relevant date, may · D
cause service of notice on the person chargeable, requiring him ·
to show cause why he should not pay the amount specified in
the notice. It is evident that the notice underthe said provision
has to be issued by the "proper officer".
                                                                             E
     13. Section 2(34) of the Act defines a "proper officer", thus:

     "2. Definitions.-.................................................. .
     (34)"proper officer", in relation to any functions to be
     performed under this Act, means the officer of customs                  F
     who is assigned those functions by the Board or the
     Commissioner of Customs;
It is clear from a mere look at the provision that only such officers
of customs who have been assigned specific functions would                   G
be "proper officers" in terms of Section 2(34) of the Act.
Specific entrustment of function by either the Board or the
Commissioner of Customs is therefore, the governing test to
determine whether an "officer of customs" is the "proper officer".
     14. From a conjoint reading of Sections 2(34) and 28 of                 H
     1058    SUPREME COURT REPORTS                   [2011] 2 S.C.R.

' A the Act, it is manifest that only such a customs officer who has
     been assigned the specific functions of assessment and re-
     assessment of duty in the jurisdictional area where the import
     concerned has been affected, by either the Board or the
    Commissioner of Customs, in terms of Section 2(34) of the Act
  B is competent to issue notice under Section 28 of the Act. Any
    other reading of Section 28 would render the provisions of
    Section 2(34) of the Act otiose in as much as the test
    contemplated under Section 2(34) of the Act is that of specific
    conferment of such functions. Moreover, if the Revenue's
  c contention that once territorial jurisdiction is conferred, the
    Collector of Customs (Preventive) becomes a "proper officer"
    in terms of Section 28 of the Act is accepted, it would lead to
    a situation of utter chaos and confusion, in as much as all
    officers of customs, in a particular area be it under the
    Collectorate of Customs (Imports) or the Preventive
  0
    Collectorate, would be "proper officers·. In our view therefore,
    it is only the officers of customs, who are assigned the functions
    of assessment, which of cour5e, would include re-assessment,
    working under the jurisdictional Collectorate within whose
  E jurisdiction the bills of entry or baggage declarations had been
    filed and the consignments had been cleared for home
    consumption, will have the jurisdiction to issue notice under
    Section 28 of the Act.
       15. In this behalf, our attention was also invited by Mr.
F Joseph Vellapally to standing order No. 35/89 dated 12th July,
  1989, issued by a Collector of Customs, holding dual charges
  of Collector of Customs, Calcutta and Collector of Customs
  (Preventive) as also to certain notifications issued by the Board
  under Section 2 (34) of the Act clearly defining the functions of
G the Customs House and the Preventive Collectorate.
         16. In the present cases, the import manifest and the bill
    of entry having been filed before the Collectorate of Customs
    (Imports) Mumbai, the same having been assessed and
    clearance for home consumption having been allowed by the
H
  COMMISSIONER OF CUSTOMS. v. SAYED ALI & 1059
             ANR. [D.K. JAIN, J.]

proper officer on importers executing bond, und~rtaking the A
obligation of export, in our opinion, the Collector of Customs
(Preventive), not being a "proper officer" within the meaning of
Section 2(34) of the Act, was not competent to issue show
cause notice for re-assessment under Section 28 of the Act.
Nothing has been brought on record to show that ,the Collector B
of Customs (Preventive), who had issued the show cause
notices was assigned the functions under Section 28 of the Act
as "proper officer" either by the Board or the Collector/
Commissioner of Customs. We are convinced that
Notifications No. 250-Cus and 251-Cus., both dated 27th c
August, 1983, issued by the Central Government in exercise
of the powers conferred by sub-section (1) of the Section 4 of
the Act, appointing Collector of Customs (Preventive) etc. to
be the Collector of Customs for Bombay, Thane and Kolaba
Districts in the State of Maharashtra did not ipso facto confer D
jurisdiction on him to exercise power entrusted to the "proper
officers" for the purpose of Section 28 of the Act. In that view
of the matter, we do 11ot find any substance in the contention of
Mr. V. Shekhar, learned Senior Counsel, appearing for the
revenue in the second set of appeals, that the source of power
to act as a "proper officer" is Sections 4 and 5 of the Act and E
not sub-section 34 of Section 2 of the Act. The said sections
merely authorize the Board to appoint officers of Customs and
 confer on them the powers and duties to be exercised/
 discharged by them, but for the purpose of Section 28 of the
Act, an officer of cu~toms has to be designated as "proper F
 officer" by assigning the function of levy and collection of duty,
 by the Board or the Commissioner of Customs. The argument
 is rejected accordingly. Similarly, revenue's reliance on the
 decision of this court in Ram Narain Bishwanath & Ors. (supra)
 is clearly misplaced. In that case the issue for determination G
was that when goods imported and cleared at Paradip Port
 (Orissa State) were seized by the Customs authorities in West
 Bengal on the allegation.that these had been imported on the
 strength 'of fictitious licences, whether the customs authorities
 at Paradip or West Bengal will have the jurisdiction to initiate H
    1060    SUPREME COURT REPORTS                  [2011] 2 S.C.R.

A adjudication proceedings. By a short order it was held that it
  was for the customs authorities at Paradip to initiate
  proceedings against the importer. Apart from the fact that none
  of the statutory provisions were considered in that case, the
  issue arising for consideration in the present appeals was not
B the subject matter therein. Thus, the said decision is of no avail
  to the revenue.

       17. For the aforegoing reasons, we do not find any merit
  in the stand of the revenue. Resultantly, C.A. Nos. 4294-4295
  of 2002, being devoid of any merit, are dismissed, while C.A.
C Nos. 4603-4604 of 2005 are allowed. Before parting with the
  cases, we once again clarify that this judgment shall not
  preclude the revenue from initiating any proceedings against
  the importers for recovery of duty and other charges payable
  in respect of the subject goods, if permissible under the Act.
D
        18. However, in the facts and circumstances of these
    cases, there shall be no order as to cost.

    R.P.                                    Appeals disposed of.